Javier Sanz-Espín

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ORCID 

Papers:

• "Labor Market Power in Spain" (2025) with José Azar [SERIEs]

Abstract: This paper provides a comprehensive analysis of labor market power in Spain, focusing on the period from 1997 to 2021. Using detailed firm-level data from the Central de Balances Integrada (CBI) of the Bank of Spain, we estimate markdowns—a direct measure of labor market power—across various sectors, firm sizes, and regions. Our findings show that there was a notable decline in markdowns following the 2008 financial crisis. However, this trend has partially reversed in recent years, suggesting a resurgence of labor market power, particularly among larger firms. We find that firms with a higher proportion of temporary workers or female workers tend to have higher markdowns. 

Working Papers:

• "The College Wage Premium in the Generative AI Era" with José Azar and Mireia Giné 

Abstract: After expanding for four decades, the U.S. college wage premium is experiencing a sustained contraction, dropping sharply between 2022 and 2026 and returning to the level of the mid-1990s. Using the Current Population Survey, we show that since 2022 the labor market is undergoing the first sustained drop in relative demand for college labor since at least 1914. This decline in relative skill demand indicates a period of reversal of skill-biased technical change (SBTC). Linking individual wage data to task-based generative AI exposure, we document that post-2022 wage growth slowed disproportionately in high-exposure occupations, which employ a larger share of college graduates. Combined with the college-non-college exposure gap, generative AI exposure accounts for 28 percent of the total drop in the college wage premium from 2022 to 2026. Therefore, differential exposure to the generative AI shock between college and non-college workers plays a quantitatively meaningful role in the recent compression of the college wage premium and the reversal of skill-biased technical change.

• "The Wage Effects of Generative AI" with José Azar and Mireia Giné

Abstract: This paper studies the impact on wages and worker mobility of generative artificial intelligence. We use occupation-by-industry data from the Occupational Employment and Wage Statistics (OEWS) and data on postings and matched employer-employee data from Revelio. We find that moving from the 10th percentile to the 90th percentile of GenAI exposure is associated with a wage decline of 4.9% in OEWS data, with no statistically detectable change in employment. In Revelio data, moving from the 10th to the 90th percentile of exposure is associated with a decline of 8.71% in posted wages, and of 10.76% in starting wages. More exposed workers experience significantly lower job-to-job transition rates, but no change in transitions to persistent non-employment. Wage declines are largest among junior workers and occur across all age groups within junior positions. Finally, we find that AI exposure is associated with a decline in the elasticity of separation with respect to wages, which suggests that firms’ labor market power has increased in occupations that are exposed to automation by GenAI. The combined evidence indicates that generative AI exposure has so far negatively affected workers’ wages, mobility, and outside opportunities in the labor market.

• "Monopsony in Spain: The Unintended Consequences of Labor Market Reforms" with José Azar (Draft coming soon)

Abstract: Policymakers frequently implement labor market reforms to enhance flexibility, increase employ ment, and improve economic efficiency. However, these interventions can also shift the balance of power between firms and workers, leading to unintended consequences. This study provides a com prehensive analysis of labor market power in Spain, focusing on the period from 2005 to 2019 and the impact of the 2012 labor market reforms. These reforms aimed to decentralize wage bargaining, reduce hiring costs, and grant firms greater flexibility in adjusting employment conditions. Using detailed firm-level data from the Central de Balances Integrada (CBI) of the Bank of Spain, we analyze labor market power dynamics in the years around the reforms and estimate markdowns–defined as the gap between a worker’s marginal revenue product and their wage–as a direct measure of labor market power. We start by looking at the overall effects of the reforms on employment, wages, and labor market power. The analysis shows that while the reforms had no significant average effect on employment or wages, they led to an increase in markdowns. Then, we analyze the heterogeneous effects of the reforms by firm size and pre-period levels of markdowns. These findings show large heterogeneity in markdowns, particularly, we show that markdowns increased more among larger firms and those that already had high markdowns. These results reveal the heterogeneous impact of the reforms, which, while enhancing flexibility for some firms, may have inadvertently strengthened wage-setting power among others, pointing at a critical policy trade-off.